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A BILL TO BE ENTITLED
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AN ACT
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relating to the Texas Community Reinvestment Act; authorizing a |
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fee. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle Z, Title 3, Finance Code, is amended by |
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adding Chapter 282 to read as follows: |
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CHAPTER 282. TEXAS COMMUNITY REINVESTMENT ACT |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 282.001. SHORT TITLE. This chapter may be cited as the |
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Texas Community Reinvestment Act. |
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Sec. 282.002. DEFINITIONS. In this chapter: |
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(1) "Banking commissioner" means the banking |
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commissioner of Texas. |
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(2) "Covered financial institution" means: |
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(A) a bank, savings bank, or credit union |
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chartered under the laws of this state; |
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(B) an entity licensed in this state to make or |
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originate residential mortgage loans that lent or originated 50 or |
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more residential mortgage loans in the previous calendar year; and |
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(C) any other financial institution under the |
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jurisdiction of the department as designated by rule by the banking |
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commissioner. |
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(3) "Department" means the Texas Department of |
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Banking. |
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Sec. 282.003. APPLICABILITY OF CHAPTER. This chapter does |
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not apply to a bank, savings bank, savings and loan association, or |
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credit union chartered under the laws of the United States. |
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Sec. 282.004. CONFLICT WITH OTHER LAW. To the extent this |
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chapter conflicts with other law, this chapter prevails. |
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Sec. 282.005. RULES. (a) The banking commissioner may |
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adopt rules necessary and appropriate to implement and enforce this |
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chapter, including rules that: |
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(1) promote access for all communities in this state |
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to appropriate financial services from covered financial |
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institutions; |
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(2) define fair lending practices in connection with |
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the activities of covered financial institutions; |
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(3) define the terms used in this chapter and |
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interpret the provisions of this chapter; and |
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(4) create a public comments process. |
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(b) To implement this chapter, the banking commissioner |
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shall adopt rules incorporating the regulations applicable to |
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covered financial institutions under federal law. The banking |
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commissioner may make adjustments and exceptions to the rules as |
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necessary. |
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SUBCHAPTER B. ASSESSMENT OF COVERED FINANCIAL INSTITUTIONS' |
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SERVICE TO LOCAL COMMUNITIES |
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Sec. 282.051. OBLIGATIONS OF COVERED FINANCIAL |
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INSTITUTIONS. (a) Each covered financial institution has a |
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continuing and affirmative obligation to meet the financial |
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services needs of the communities in which the institution's |
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offices, branches, and other facilities are maintained that is: |
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(1) consistent with the safe and sound operation of |
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the financial institution; and |
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(2) for a credit union, consistent with the credit |
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union's common bond. |
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(b) Each covered financial institution that provides all or |
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a majority of the institution's products and services through |
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mobile and other digital channels has a continuing and affirmative |
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obligation to help meet the financial services needs of |
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deposit-based assessment areas, including areas contiguous to |
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those areas, low-income and moderate-income neighborhoods, and |
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areas where there is a lack of access to safe and affordable banking |
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and lending services, that is: |
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(1) consistent with the safe and sound operation of |
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the financial institution; and |
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(2) for a credit union, consistent with a credit |
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union's common bond. |
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Sec. 282.052. ASSESSMENT OF COVERED FINANCIAL |
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INSTITUTIONS. (a) The banking commissioner shall assess the |
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record of each covered financial institution in satisfying the |
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financial institution's obligations under Section 282.051. |
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(b) The banking commissioner by rule shall provide for an |
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assessment of the following factors relating to whether covered |
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financial institutions are meeting the financial services needs of |
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local communities: |
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(1) activities to ascertain the financial services |
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needs of the community, including communication with community |
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members regarding financial services provided; |
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(2) extent of marketing activities to make members of |
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the community aware of the financial services offered; |
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(3) origination of mortgage loans, including home |
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improvement and rehabilitation loans, and other efforts to assist |
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existing low-income and moderate-income residents to be able to |
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remain in affordable housing in the their neighborhoods; |
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(4) for small business lenders, the origination of |
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loans to businesses with gross annual revenues of $1,000,000 or |
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less, particularly those in low-income and moderate-income |
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neighborhoods; |
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(5) participation, including investments, in |
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community development and redevelopment programs, small business |
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technical assistance programs, minority-owned depository |
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institutions, community development financial institutions, and |
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mutually-owned financial institutions; |
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(6) efforts working with delinquent customers to |
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facilitate a resolution of the delinquency; |
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(7) origination of loans that show an undue |
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concentration and a systematic pattern of lending resulting in the |
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loss of affordable housing units; |
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(8) evidence of discriminatory and prohibited |
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practices; and |
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(9) other factors that reasonably bear on the extent |
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to which a covered financial institution is meeting the financial |
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services needs of the institution's entire community, including |
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responsiveness to community needs as reflected by public comments. |
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Sec. 282.053. EXAMINATIONS; FEES. (a) The banking |
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commissioner, in consultation with state and federal agencies with |
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appropriate regulatory authority, may examine each covered |
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financial institution for compliance with this chapter and other |
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applicable state and federal fair lending laws, including: |
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(1) the Texas Fair Housing Act (Chapter 301, Property |
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Code); |
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(2) the Equal Credit Opportunity Act (15 U.S.C. |
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Section 1691 et seq.); and |
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(3) the Home Mortgage Disclosure Act of 1975 (12 |
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U.S.C. Section 2801 et seq.). |
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(b) The banking commissioner may adopt rules with respect to |
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the frequency and manner of examination, including the imposition |
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of examination fees. |
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(c) The banking commissioner shall appoint a suitable |
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person to perform the examination. The banking commissioner or the |
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commissioner's appointees may: |
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(1) examine the books, records, documents, and |
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operations of each covered financial institution or the |
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institution's parent company, subsidiaries, affiliates, or agents; |
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and |
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(2) examine under oath any officers, directors, |
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employees, and agents of the covered financial institution or the |
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institution's parent company, subsidiaries, affiliates, or agents. |
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(d) Any document or record prepared or obtained in |
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connection with or relating to the examination, and any record |
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prepared or obtained by the banking commissioner, to the extent |
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that the record summarizes or contains information derived from any |
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document or record described by this section, is not public |
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information subject to disclosure under Chapter 552, Government |
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Code, unless otherwise provided by this chapter. |
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Sec. 282.054. WRITTEN EVALUATION. (a) On completion of an |
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examination of a covered financial institution under Section |
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282.053, the banking commissioner shall prepare a written |
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evaluation of the covered financial institution's record of |
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performance under this chapter. |
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(b) Each evaluation must have: |
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(1) a public section that includes, at a minimum, the |
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information that would be disclosed in a written evaluation under |
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the Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et |
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seq.); and |
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(2) a confidential section. |
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(c) After the banking commissioner gives the covered |
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financial institution an opportunity to comment on the evaluation, |
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the banking commissioner shall make the public section of the |
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evaluation open to public inspection on request. |
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(d) The written evaluation must include: |
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(1) the assessment factors used to determine the |
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covered financial institution's descriptive rating; |
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(2) the banking commissioner's conclusions with |
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respect to each assessment factor; |
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(3) a discussion of the facts supporting those |
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conclusions; |
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(4) the covered financial institution's descriptive |
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rating and the basis for the rating; and |
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(5) a summary of public comments. |
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Sec. 282.055. RATINGS FOR RECORD OF PERFORMANCE. (a) Based |
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on an examination under Section 282.053, the banking commissioner |
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shall assign a covered financial institution one of the following |
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ratings in regard to the institution's record of performance in |
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meeting the institution's community financial service needs: |
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(1) outstanding; |
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(2) satisfactory; |
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(3) needs to improve; or |
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(4) substantial noncompliance. |
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(b) Notwithstanding the provisions of this chapter, the |
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banking commissioner may establish an alternative examination |
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procedure for any covered financial institution that, as of its |
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most recent examination, has been assigned a rating of outstanding |
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or satisfactory for the institution's record of performance in |
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meeting the institution's community financial services needs. |
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Sec. 282.056. PUBLIC NOTICE. Each covered financial |
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institution shall provide, in the public lobby in each of the |
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institution's offices and on the institution's Internet website, a |
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public notice that is substantially similar to the following: |
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"STATE OF TEXAS |
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COMMUNITY REINVESTMENT NOTICE |
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The Texas Department of Banking (department) evaluates our |
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performance in meeting the financial services needs of this |
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community, including the needs of low-income to moderate-income |
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households. The department takes this evaluation into account when |
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deciding on certain applications submitted by us for approval by |
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the department. Your involvement is encouraged. You may obtain a |
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copy of our evaluation. You may also submit signed, written |
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comments about our performance in meeting community financial |
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services needs to the department." |
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Sec. 282.058. CORPORATE ACTIVITIES AND RENEWAL |
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APPLICATIONS. (a) The banking commissioner shall consider the |
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record of performance of the covered financial institution and the |
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institution's parent company, including subsidiaries, relative to |
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this chapter in considering an application for: |
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(1) the establishment of a branch office or other |
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facility; |
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(2) the relocation of a main office, branch office, or |
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other facility; |
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(3) a license renewal; |
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(4) a change in control of a covered financial |
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institution; or |
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(5) a merger or consolidation with, the acquisition of |
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assets of, or the assumption of liabilities of: |
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(A) a covered financial institution; |
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(B) an out-of-state bank, credit union, or |
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residential mortgage licensee; |
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(C) a national bank or credit union; or |
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(D) a foreign financial institution. |
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(b) The record of performance of the covered financial |
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institution may be the basis for the denial of an application |
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described by Subsection (a). |
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SUBCHAPTER C. COOPERATIVE AGREEMENTS |
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Sec. 282.101. COOPERATIVE AGREEMENTS. (a) For purposes of |
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this chapter, the banking commissioner may: |
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(1) conduct any examinations under this chapter with |
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state, other state, or federal regulators; |
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(2) enter into cooperative agreements regarding: |
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(A) the coordination of or joint participation in |
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the examinations; |
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(B) the amount and assessment of examination |
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fees; or |
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(C) enforcement actions related to the |
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examinations; and |
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(3) accept reports of examinations by other regulators |
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under those agreements. |
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(b) Any coordination or joint participation under this |
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section: |
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(1) may seek to promote efficient regulation and |
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effect cost reductions for the department and covered financial |
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institutions; and |
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(2) may not limit public participation as permitted |
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under certain federal regulations. |
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Sec. 282.102. CONFIDENTIALITY; PRIVILEGES. Any |
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information or material shared for purposes of coordination or |
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joint participation under this subchapter continues to be subject |
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to the requirements under any federal or state law regarding the |
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privacy or confidentiality of the information or material. Any |
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privilege arising under federal or state law, including the rules |
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of any federal or state court, with respect to the information or |
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material, continues to apply to the information or material. |
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Sec. 282.103. AUTHORITY NOT LIMITED. This subchapter may |
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not be construed as limiting the authority of the banking |
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commissioner to independently conduct examinations of and |
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enforcement actions against a covered financial institution. |
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SECTION 2. Subchapter C, Chapter 404, Government Code, is |
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amended by adding Section 404.0213 to read as follows: |
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Sec. 404.0213. CONSIDERATION OF FINANCIAL INSTITUTION'S |
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COMMITMENT TO COMMUNITY. (a) In addition to any other requirements |
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under law, the comptroller shall consider a financial institution's |
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record and current level of financial commitment to the |
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institution's local community when deciding whether to deposit |
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state funds in the financial institution. The comptroller may |
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consider: |
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(1) for financial institutions subject to the |
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Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et |
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seq.), the current and historical ratings that the financial |
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institution has received, to the extent that those ratings are |
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publicly available, under that law; |
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(2) any changes in ownership, management, policies, or |
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practices of the financial institution that may affect the level of |
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the financial institution's commitment to the institution's |
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community; |
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(3) the financial impact that the withdrawal or denial |
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of deposits of state funds might have on the financial institution; |
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and |
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(4) the financial impact to the state as a result of |
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withdrawing state funds or refusing to deposit additional state |
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funds in the financial institution. |
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(b) State funds may not be deposited in a financial |
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institution subject to the Community Reinvestment Act of 1977 (12 |
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U.S.C. Section 2901 et seq.) unless the institution has a current |
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rating of satisfactory or outstanding under that law. |
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(c) When investing or depositing state funds, the |
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comptroller may give preference to financial institutions that have |
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a current rating of outstanding under the Community Reinvestment |
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Act of 1977 (12 U.S.C. Section 2901 et seq.). |
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(d) This section may not be construed as authorizing the |
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comptroller to conduct an examination or investigation of a |
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financial institution or to receive information that is not |
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publicly available and the disclosure of which is otherwise |
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prohibited by law. |
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SECTION 3. This Act takes effect September 1, 2021. |